This is the most frequently asked question by individuals and, of course, the answer depends on the size and type of system being installed. Perhaps the most tangible way of considering cost is to use the analogy of buying a new car. Most new cars and SUV’s will cost between $10,000 and $50,000. A photovoltaic system and wind system will also run in that range. A solar domestic hot water system will range between $5,000 and $10,000 for residential installations.
What is the payback period for these systems?
The answer is “yes” these systems will pay for themselves. The cost basis used in calculating the payback is the key to assessing a “payback” period. If we assume the cost of electricity and natural gas will not increase over time, a PV system will take 20 to 50 years to "pay for itself". These parameters are based on Michigan's current energy costs, and Michigan's current legislative incentives. For installations in States like Wisconsin, Illinois, Indiana, Ohio, Pennsylvania, New Jersey, New York, Vermont and Texas, not to mention the south-western and north-western U.S., the incentives are strong, net metering exists, and the payback periods are accelerated accordingly. Click here for more details on incentives. A solar hot water system will pay itself off in 4 to 10 years. If we consider the reality of our energy cost paradigm, we will likely see energy costs doubling or tripling in the next decade. This will rapidly accelerate the payback of your renewable energy systems.
The analogy stated above with the car and SUV now becomes clearer. The car and SUV do not pay for themselves, they cost a lot to maintain and use, and they only are useful for 5 to 10 years for most people, at which point they are replaced, and the cost cycle continues.
How long do these systems work?
PV panels are warranted for 20 to 25 years for power output. Inverters are warranted for 5 to 10 years depending on the manufacturer. Because PV systems do not have moving parts, their useful life is estimated upwards of 50 years under normal conditions. Solar domestic hot water systems will last for upward of 20 to 30 years with the replacement of a pump, tank, or collector, possibly. Most service calls regarding DHW systems are for check-ups and re-charging of the glycol-water mix in the closed loop portion of the system. Most of these service calls are on systems installed in the early 1980’s.